Monday, January 11, 2016 by John Sharp (Hatcher+) 3,281 Views
The problem involving whether to build or buy a cloud-based data platform to serve your workspace’s growing needs involves come complex issues. It’s usually a good idea to start with some basic questions.
Does the Technology Currently Exist?
Not many years ago, creating in-house platforms was a daunting task, requiring months or even years of planning, development, and testing. Now, with dozens of open-source frameworks available, building a enterprise platforms is relatively straught-forward. Need maintenance? Just pick a plan. Certified outsourced development? There’s hundreds of companies to choose from.
I recently showed such a system to a group of entrepreneurs that had just spent a year and “over two hundred thousand dollars” building a commercial real estate market place. CodeCanyon.net had three such systems available, the most expensive of which cost all of US$138.00. A test version was available, so their CTO and I went through it. It was beautifully written and well-documented, had multiple layers of user, permissions and even included the ability to manage a reseller network – something these guys didn’t conceive would be included on their dev roadmap for at least another year.
So unless your requirements are truly revolutionary, the bottom line is: whatever you’re looking for, it’s probably already out there, and available for a one thousandth of the cost to build it from scratch.
Does the technology provide you with a core competitive advantage?
If your roadmap requires this technology to provide the next phase of revenue growth, that doesn’t necessarily mean you shouldn’t kickstart your development by using existing API frameworks or cut and paste solution. We recently invested in a company that is doing highly risk scoring based on proprietary analysis of complex compliance issues. The front end, back end, database, user management, document management, and other components were created from off the shelf components.
The middleware – the business rules that the system uses to compile its FICO-like scores – that comprise the heart of the offering, and the core of the value, have received almost 95% of the development budget to date, which to be, is a smart use of resources.
Is the data safe?
Depending on the type of data in question, no question is likely to cause greater hairloss among CIOs. Every day, new data breaches pop up to remind us that the cloud is a dangerous place.
Can encryption help? Sure – but as Google found out a couple of years back, courtesy of the NSA, encryption only helps if you apply it at the right point in the chain. Stopping data theft also requires that you don’t leave the keys in the ignition.
Then there are the issues involving sovereighty. A few years back I was building a system in South Korea just at the time the rules were changing there regarding storage and retriveal of personal data. Overnight, the transfer of data involving individuals out of South Korea was disallowed and our use of a central database hosted by AWS because illegal.
The basic lessons for me from these situations were, you can’t asume a static data model, and you can’t assume you’re too small, uninteresting, or secure to get hacked.
Are you set up to be a development shop?
One of my friends is highly-experienced CIO at a massive US-based portal. He recently told me he has given up maintaining his own purpose-built CMS in favor of a WordPress integration. When I asked him why, he said he had looked at the total cost of ownership and decided that his organization could be made more profitable by moving away from a home-maintenance approach to a non-proprietary system.
And I guess that response, more than any other, should be the real basis for every other decision analyzed above: does the decision drive more or less profitability?
As the guys with the “C” in our title, it is our responsibility to create valuable assets and maintain profitable businesses. If selecting a “cut and paste” platform does not remove value (or threaten the integrity of the business), and improves profitability, then the decision is clear.
Note: This article was originally reproduced in APAC CIO Outlook magazine.
John is a Partner at Hatcher Plus, the leading data-driven venture capital investment firm. John has extensive commercial experience at the senior management level, having been the Chief Executive Officer of Authentium, Inc. the Managing Director, Asia, of WorldSpace, and CEO of Hatcher, the precursor company to Hatcher+. A tenacious and driven executive with longstanding board-level and C-suite level management experience within high-growth companies, John also brings a strong history of capital raising from an extensive network of investors globally. As Chairman and CEO of cybersecurity pioneer Authentium (acquired by CYREN in 2010), John co-authored three US patents and developed and sold cybersecurity solutions to some the largest organizations in the world, including the US Department of Commerce, NASA, AOL, British Telecom, Comcast, Cox Communications, Google, McAfee, Microsoft, Symantec, and Telstra. As CTO at Hatcher+, DocDoc, Heardable, and ThoughtRiver, John has designed and developed several highly-innovative technology platforms using cutting-edge approaches to data processing, user interface design, and workflow optimization. John is a frequent blogger and an in-demand speaker at venture events globally, and has extensive experience implementing ESG solutions as Chairman and/or board member of numerous start-ups, including director roles at trade finance provider ASYX and payment aggregator Mozido, and roles as Chairman of MENA-based financial services pioneer Telr, and the leading Cambridge-based legal services technology company, ThoughtRiver.
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